Daimler Trucks North America LLC et al v. McComb Diesel, Inc. et al

Filing 118

ORDER granting 91 Motion for Summary Judgment. Signed by Honorable David C. Bramlette, III on March 22, 2016. (lda)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION
DAIMLER TRUCKS NORTH AMERICA LLC;
WESTERN STAR TRUCK SALES, INC.; AND
DETROIT DIESEL CORPORATION
Plaintiffs
vs.
MCCOMB DIESEL, INC. AND
FRANCISCO JOSE MONTALVO
Defendants

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CIVIL ACTION NO. 5:15-cv-00030

JUDGE: David C. Bramlette, III
MAGISTRATE JUDGE:
Michael T. Parker

ORDER AND REASONS

THIS MATTER came before the Court on Daimler Trucks North America LLC and
Western Star Truck Sales, Inc.’s (“Plaintiffs”) Motion for Summary Judgment Regarding the
Right of First Refusal [Rec. Doc. 91]. Having considered the Motion, the Memoranda, the
evidence, the argument of counsel, and the law, the Court finds as follows:
1. Plaintiffs and Defendant, McComb Diesel, Inc. (“McComb Diesel”) are parties to a
contract entitled “Western Star Trucks Dealer Sales and Service Agreement”
(“Agreement”). The Agreement’s clear purpose is to provide for the sale and service of
Western Star vehicles. The Agreement provides for a right of first refusal, granting
Plaintiffs the right to purchase McComb Diesel’s “dealership assets or stock” in the event
McComb Diesel desires to sell same. This is consistent with the clear purpose of the
Agreement.
2. The Court finds the provision of the Agreement concerning the scope of Plaintiffs’ right
of first refusal to be clear and unambiguous such that the contracting parties’ intent can
be discerned from the four corners of the Agreement. The Court finds that the right of

first refusal covers McComb Diesel’s dealership business only. The Agreement’s clear
purpose, as stated in the Agreement itself, is to permit McComb Diesel to sell and service
Western Star vehicles. The Agreement does not contemplate granting Plaintiffs a right of
first refusal over property not contemplated by the Agreement.
3. If the Court finds that Plaintiffs’ obligation to exercise or waive its right of first refusal
were triggered by the Asset Purchase Agreement between McComb Diesel, Harvest
Haul, Inc., Fiber Plus, LLC, Magnolia Motors, and Old River of McComb, LLC,
Plaintiffs would be required either to purchase several assets not covered by its right of
first refusal, or to waive its bargained-for property right. The Court declines to adopt
such a rule, which may permit a creative property owner to expand the scope of a right of
first refusal ad infinitum such that a rightholder’s right of first refusal would be
effectively rendered a nullity. The Court instead finds that the APA did not trigger
Plaintiffs’ obligation to exercise or waive its right of first refusal. Oral argument was
requested and was granted, and on the 17th day of February, 2016, at the Federal
Courthouse at Natchez, Mississippi a hearing was held and the parties made their
respective presentations.

In the event of an appeal, a transcript of this hearing is

available.
NOW, THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY
ORDERED THAT:
1. Daimler Trucks North America LLC and Western Star Truck Sales, Inc.’s Motion for
Summary Judgment Regarding the Right of First Refusal [Rec. Doc. 91] is GRANTED.
2. Daimler Trucks North America LLC and Western Star Truck Sales, Inc.’s prayer for a
Declaratory Judgment pursuant to 28 U.S.C. § 2201, et seq. is GRANTED, and the Court
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enters a Declaratory Judgment that Daimler Trucks North America LLC and Western
Star Truck Sales, Inc.’s obligation to exercise or waive their right of first refusal was not
triggered by the October 31, 2014 Asset Purchase Agreement.
3. Daimler Trucks North America LLC and Western Star Truck Sales, Inc.’s prayer for an
injunction enjoining McComb Diesel, Inc. from proceeding with the sale contemplated
by the October 31, 2014 Asset Purchase Agreement is GRANTED, and the Court enters
an injunction preventing McComb Diesel, Inc. and/or Francisco Jose Montalvo from
closing on the sale contemplated by the Asset Purchase Agreement.

Thus, done and signed at Natchez, Mississippi, this 22nd day of March, 2016
BY THE COURT:

s/David Bramlette
HON. DAVID C. BRAMLETTE, III
U.S. DISTRICT COURT JUDGE

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